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Provides the information on how to check Income Tax Refund Status for both old and new assessment years & explains probable outcomes of refund status and factors influence the refund.
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Keep the below information handy when checking
Assessment Year (AY) means: It is the twelve-month period 1st April to 31st March immediately following the financial year. In the Assessment year a person files his return for the income earned in the financial year. For example for FY: 2023-24 the AY is 2024-25
For FY 2022-23 ( AY 2023-24 ) or after, from ITD portal
For FY 2021-22 ( AY 2022-23 ) or before, from NSDL portal
IT Refunds in India depends on many factors. While it takes 2-3 months during early months of filing for an assessment year (eg. Apr-Jun), it takes many more months if you happened to file after Jun (i.e., peak months of ITR processing). In addition, if you have received an IT notice, the refund would be granted only after the received notice(s) have resolved.
As on Feb 2021, ITD implemented new Refund Processing System to enable faster Refund processing with an expected turnaround of just few days instead of few months.
Despite the fact that refund processing time is dependent on a number of factors, such as the history of audits, previous IT notices from the Income tax Department (ITD), and claims for large refunds, etc., according to the most recent knowledge (Aug 2023), what is a reasonable estimation based on the type of ITR form you have filed?
The failure to complete the e-verification of your ITR is a common cause of delayed Income Tax Return (ITR) processing, which in turn results in delayed IT Refund.
Processing cannot be done until e-verification is completed. The ITR is deemed "ineligible to process" if the e-verification procedure is not completed within 30 days of e-filing. Therefore, it is necessary to submit a new ITR via e-filing.
If the taxpayer has unpaid tax demands from previous years, the ITD system will automatically adjust the IT refund to reflect the outstanding demands. This may result in a partial or full refund.
The income tax department typically processes your return within a few weeks to a few months of e-verification. Nevertheless, the process of efiling ITR-2/3/4 during July is typically quite time-consuming.
Occasionally, the taxpayer may request a refund reissue, which is processed in batches in accordance with EZTax's experience. This may result in a delayed deposit of the refund.
As the revised ITRs are common these days, it is necessary to revise them after the original ITR has been processed in order to ensure a predictable outcome. If not, the original ITRs may get processed before the earlier efiled ITRs at times.
Occasionally, taxpayers and consultants submit multiple revised ITRs before an earlier revision get processed.
EZTax automatically selects the appropriate ITR form during the efiling process; however, the Government ITD portal may require you to select the correct ITR form in advance. This may present a challenge for a significant number of individuals.
Wrong ITR Form selection during eFiling may result in a defective IT Notice, forcing the correction of the ITR. This may result in a delay in both processing and the possible refund.
Since 2020, there have been numerous bank mergers and closures, which may have resulted in the IFSC code being altered or the account status being deemed dormant.
This may result in the tax refund not being deposited. In this scenario, it is possible to submit a request for a "refund re-issue" through the Government ITD Portal.
EZTax has observed that the processing of ITRs and, consequently, the processing of IT refunds is delayed when taxpayers have received notices in previous years. Therefore, it is crucial to ensure that efiles are completed accurately and to minimize the exposure to IT notices.
The process of sending ITR-V to the Centralized Processing Center (CPC) in Bengaluru via post or courier is time-consuming and may result in physical sorting. Additionally, the system may require additional time to acknowledge the receipt of the ITR-V. This solely depends on the timing of your post.
Physical verification typically requires a significant amount of time during the months of July and August, which may result in a further delay in your refund.
IT systems frequently experience errors, which may result in a delay in the processing of IT refunds.
One could choose to contact the ITD Call Center to inquire and request that they reprocess the request after a sufficient amount of time has passed.
Not all IT refunds are processed automatically by the IT systems. When the IT Refund is large, such as above 1 crore, the approval authority lies with the Principal Commissioners of Income Tax (Pr. CsIT).
Similarly, refund in conjunction with a court order would be processed manually, and may take upto 6 months to issue a refund.
Disclaimer: This article provides an overview and general guidance, not exhaustive for brevity. Please refer Income Tax Act, GST Act, Companies Act and other tax compliance acts, Rules, and Notifications for details.